The decline in house prices is finally beginning to slow, according to the latest report on the housing market.
The Daft.ie House Price Report claims the first quarter of 2012 recorded the smallest decline in asking prices since the property market hit its peak five years ago.
Prices fell 1.4% on average in the first three months of the year compared to 8% in the final quarter of 2011.
However, prices in Dublin and Galway city centres bucked the national trend and actually rose 4% and 2.3%. The national average asking price for a house is now €177,000 — down 52% from the peak of the market in 2007 when it stood at €366,000.
According to Daft.ie, the total number of properties available for sale at the moment is 54,000 — the lowest figure in four years.
The report claims the relatively small number of properties for sale combined with a 3% rise in the number of houses which sell within four months to 33% provides evidence of increased activity in the market. Daft.ie economist, Ronan Lyons said the figures were surprising given the economic conditions.
The results also contrast with last week’s figures by the CSO which showed that property prices had fallen 2.2% in February and over 4% since the start of the year. However, some property experts claim the CSO figures lag behind the market by several months.
“It is possible that the market was waiting to see if the substantial reductions seen in late 2011 would have an impact,” said Mr Lyons. However he said it was unlikely that prices would stabilise nationally until there was a substantial increase in activity which would be linked to greater mortgage lending by banks.
Seamus Coffey, a UCC economics lecturer, said a good guide is that house prices should be 12 to 15 times the annual rent that a property can generate.
However, he claimed Ireland does not have a properly functioning property market typified by the virtual disappearance of investors from the residential homes sector.
Mr Coffey said the monthly rent on a property to justify the national mean price of €177,000 should be €1,000 to €1,250.
For example, he said prices for three-bed houses in Cork city which have average asking prices of €189,000 are overvalued on the basis that the asking rent for such houses is €850 per month.
“At a ratio of 15 times annual rent, a monthly rent of €850 should equate to a price of around €155,000,” said Mr Coffey.
The Daft.ie report also found prices in the rental sector had remained stable for the past two years.
* Very steep falls in prices in late 2011, especially Carlow, down almost 11%.
* Prices in most Leinster counties more than 50% below their 2007 peak.
*14,000 properties for sale in March. 36% of properties are selling within four months.
* Average price of 3-bed house: Kildare — €191,000; Laois — €113,000; Wexford — €143,000; Meath — €171,000; Wicklow — €213,000.
* Asking prices rose in two parts of the capital — the city centre and south Dublin.
* Prices in other parts of Dublin are 20% lower than a year ago.
* 5,000 properties for sale in Dublin in March — the lowest level since mid-2007.
* 40% of properties sold within 3 months.
* Average price of 3-bed house: city centre — €225,000; north county – €234,000; south county — €342,000.
* Prices fell sharply across province, including Limerick, down over 40% from peak.
* Smallest fall in asking prices of any region.
* Also smallest fall in number of properties for sale.
* No increased activity unlike other provinces.
* Average price of a 3-bed house: Cork City — €189,000; Cork county — €162,000; Limerick City — €166,000; Kerry — €176,000; Waterford county — €179,000.
* Prices fall sharply across the provinces, especially Monaghan, down almost 9%.
* Prices in Roscommon were relatively stable following a period of sharp falls.
* Number of properties for sale still high despite slight fall over past 18 months.
* Average price of a 3-bed: Galway city — €182,000; Galway county — €162,000; Donegal — €130,000; Cavan — €136,000
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